AFP eWire December 18, 2012: Print Version
50th International Conference on Fundraising in San Diego - April 7-9, 2013 Advance Registration is until January 25th—Register NOW and Save BIG!
Advance registration is on for the 50th AFP Annual International Conference on Fundraising in San Diego, presented by Blackbaud—Register TODAY for BIG savings!
Worried about the future of philanthropy? Don’t be! Joining us in San Diego will be five young philanthropists who are making incredible change around the world. Collectively, these amazing young philanthropists have impacted the lives of people on six continents and have raised awareness—as well as millions of dollars—for an outstanding array of causes!
This year, our goal is to engage and re-energize our profession. Join us and be a part of our efforts to create balance, focus on critical priorities, and simplify complexities—we’ll explore what it means to beDoing The Right Things…Right!
Go to conference.afpnet.org for more information and register TODAY! See you in San Diego in 2013!
Wrapping Up 2012: Important Tax Reminders for U.S. Nonprofit Professionals
By Laura Kalick
With the country inching ever-closer to the edge of the metaphoric fiscal cliff, policymakers are discussing a number of proposals that are bound to impact nonprofit organizations’ ability to raise funds now and in the coming year. Due to the great uncertainty around taxes for next year, charities should take a hard look at their year-end fundraising tactics and consider communication efforts that will ensure donors are aware of how their gifts will be treated. Below are some key considerations to keep in mind as you wrap up year-end giving campaigns and brace for what lies ahead in 2013:
Understand Tax Change Scenarios: To wrap up the debate in Washington, there are various scenarios that could impact charitable giving, including increasing or decreasing tax rates, lowering the value of charitable deductions, changing deductions to tax credits or the adding of a floor before any charitable donations could be deducted. Politicians are currently negotiating changes to the tax code that could have a major impact on charitable fundraising in the year(s) to come. Nonprofit professionals should encourage donors to make gifts now, while the tax outcome is certain, rather than waiting until next year when the rules may be changed.
Know Some of the Favorable Tax Rules: Currently, favorable rules under the tax laws allow a donor to make gifts to charities of appreciated stock in 2012. In short, if stock is given to a charity there is no tax on the gain and donors can claim a deduction for the full fair market value. Again, tax rules could be changed in the future but the current tax rule is favorable to donors. This is in contrast to selling the stock, paying tax on the gain and then making a gift. These favorable rules for gifts to charities of publicly traded stock apply to shares held by the donor for more than one year, i.e., long-term capital gain property.
Remind Donors of Donation Deadlines: As a result of current favorable rules and potential changes in 2013, many individuals may be in a rush to squeeze in their last minute gifts. It is always helpful to remind donors that charitable gifts must be made on or prior to December 31st to be considered made in 2012. A gift is considered “made” when it is unconditionally delivered. For example, a check is considered “delivered” on the date the check is mailed. If a donor cannot get to the post office or prefers not to make a contribution via check, credit card contributions make the most sense as the date the individual makes the charge is the date of the contribution. There are also specific rules when a gift of property is made as there may be requirements for additional forms and/or appraisals, depending upon the size of the non-cash gift.
Ensure Proper Gift Recognition: It is critical that charities provide donors proper documentation about their qualification to receive charitable gifts. A charity must give donors a written statement acknowledging any gift payments greater than $75 for quid pro quo donations, with full disclosure regarding whether the donor has received goods or services in return. If good or services were received, the charity must let the donor know the fair market value of the goods received in return for the payment. This is true also where there is a charity auction or a raffle. The rule for raffle tickets is the cost of the ticket is not deductible because the cost of the chance to win is the price that was paid for the ticket, i.e., fair market value. For a charity auction, the price that the bidder paid was presumably the fair market value of the item and no deduction can be claimed even though the charity received the money. However, if the donor paid a price higher than fair market value, the excess can be deducted.
Many donors will ask for duplicate charitable gifts receipts near tax time. In addition to these letters from a charity for gifts of $250 or more, donors should be keeping records of cash payments such as cancelled checks, bank statements or credit card statements to show the name of the charity, the date of the gift and the amount donated.
While this is an uncertain time for the U.S. economy and many Americans, there are many measures including those listed above that will help ensure the fiscal stability of your organization. While you don’t need to be an expert in nonprofit accounting, it is important to understand and properly communicate to your constituents the potential changes affecting charitable contributions and how they can make the most out of their year-end giving plans.
About the author:
Laura Kalick, JD, LLM in Taxation, National Director, Nonprofit Tax Consulting
Laura has over 35 years of experience in both private and government practice, including the Internal Revenue Service (IRS) National Office, the United States Senate, and large accounting and law firms. She is the co-chair of the American Bar Association’s Exempt Organization Subcommittee on Unrelated Business Income Tax (UBIT). Along with her numerous professional affiliations, she has published a number of articles and co-authored two books. Laura received her B.A. from the University of Michigan, her J.D. from George Washington University, and her L.L.M., Taxation from Georgetown University. She is also a regular contributor to BDO’s Nonprofit Standard blog, The Nonprofit Standard Newsletter, and the BDO Knows Healthcare Newsletter.
Wrapping Up 2012: Issuing Donation Receipts in Canada
There’s much less tax uncertainty right now for Canadian charities but the proper issuing of receipts for donations continues to be a problem. Charities don’t have to issue receipts, but when they do, Canada Revenue Agency audits find that nearly 90 percent have at least one error of some kind, according to Mark Blumberg. There are substantial penalties for inappropriate receipting.
CRA Gift and Receipting Issues: http://www.cra-arc.gc.ca/chrts-gvng/chrts/prtng/rcpts/menu-eng.html
CRA sample receipts: http://www.cra-arc.gc.ca/chrts-gvng/chrts/pbs/rcpts-eng.html
Mark Blumberg “Receipting Kit:” http://www.canadiancharitylaw.ca/index.php/articles/top_receipting_concerns_for_canadian_registered_charities_by_mark_blumberg/
Fiscal Cliff Could Send the Charitable Deduction Over the Edge! Action Needed TODAY!
As noted in this New York Times article, the charitable deduction is at risk during the fiscal cliff negotiations. Both parties continue to seem very open to a hard cap on all deductions, which would decimate the charitable giving incentive. As was reflected in the article, a $35,000 limit on all itemized deductions would leave many taxpayers no room for charitable giving deductions once they had taken deductions for home mortgage interest and state and local taxes.
Contact your Members of Congress TODAY! If we are to preserve the charitable deduction, Congress must hear from us. Members and their staffs are negotiating behind closed doors as we speak, and they must understand that capping itemized deductions, including the charitable deduction, would be devastating to charitable giving. Please personalize this e-letter that you can send to your House Member and two Senators with the mere push of a button.
Fundraising News and Tips
Small Change Builds Big Awareness
Loose change has been a mainstay of charity impulse giving for years - everything from the Red Kettle campaign to the airport collection pots where departing visitors drop the last of their foreign currency. Now there's a virtual equivalent: rounding up debit card purchases to create "virtual change," then allocating it to charities through ChangeIt. (Hilborn Charity News)
Please Don’t Mess With the Charitable Deduction
WHATEVER else we do about the tax code, we need to save the charitable deduction, which has done so much good in our country and springs directly from some of our deepest values. (The New York Times)
Nonprofits Looking for Political Clout
As executive director of the Friends of the San Francisco Public Library, Scott Staub raises money to give to the city's libraries. In his spare time, he raises money to give to politicians, heading a political action committee trying to increase the political clout of the nonprofit sector in federal elections. (San Francisco Chronicle)
Ten Things You Might Have Missed (and Need to Know)
There’s so much information online that you’re bound to have missed some of it. Here’s some of the top items and ideas from last week you need to know about and that can help you find success, including stories on fundraising strategy, Facebook, direct mail, collaboration, mobile fundraising and corporate philanthropy.
2013 Webinar Schedule Now Available
Twenty-two webinars have been scheduled for 2013, covering issues such as transformational gifts, the case for support, donor prospecting, strategic planning, annual giving, fundraising plans, and much more! Check out the full list here and sign up for webinars now.
Sign Up for the AFP Fundamentals of Fundraising eLearning Course
The popular face-to-face introductory course, the AFP Fundamentals of Fundraising Course, is now available as an eLearning course! The new AFP Fundamentals of Fundraising eLearning Course is composed of seven modules that have been designed by experienced fundraising professionals to meet the real-world needs and challenges nonprofit organizations face every day. This course includes case studies and video segments, making the learning experience both substantive and enjoyable.
Bob Carter Companies to Sponsor Youth in Philanthropy Awards
AFP thanks the Bob Carter Companies for their support and sponsorship of the 2013 William R. Simms Awards for Outstanding Youth in Philanthropy. Two awards, an Individual and a Youth Group Award, will be presented at The Celebration of Philanthropy at AFP’s International Conference on Fundraising, April 6, 2013, in San Diego. Our youth honorees this year were Jeneece Edroff, O.B.C., and Megan and Justin Churchman. Thanks again to the Bob Carter Companies for their support of AFP’s work in encouraging young people to get involved in philanthropy.
AFP Member Exclusives
This Week's Free AFP Information Exchange Paper for Members: Involving Your Board Members in Fund Development - Simone P. Joyaux, ACFRE
It’s your job to help board members do their job in fund development. But who is “you”? The development officer. The executive director. The board chair. The chair of the board’s fund development committee. No one – including your development officer – does this work alone. This is a team enterprise. Volunteers – especially board members – are particularly important.
• Read the paper! - http://www.afpnet.org/files/secure/index.cfm?FileID=82008
Lights...Camera...AFP Action University! AFP Action University Book Review (Video): 11 Rules for Creating Value in the Social Era, by Nilofer Merchant
The era of social technologies provides seemingly endless opportunity, both for individuals and organizations. But it’s also the subject of seemingly endless hype. Yes, social tools allow us to do things entirely differently—but how do you really capitalize on that? In 11 Rules for Creating Value in the Social Era, social strategist and insightful blogger Nilofer Merchant argues that “social” is much more than “media.” Smart companies are letting social become the backbone of their business models, increasing their speed and flexibility by pursuing openness and fluidity. This ebook offers new rules for creating value, leading, and innovating in our rapidly changing world. These social era rules are both provocative and grounded in reality—they cover thorny challenges like forsaking hierarchy and control for collaboration; getting the most out of all talent; allowing your customers to become co-creators in your organization; inspiring employees through purpose in a world where money alone no longer wields that power; and soliciting community investment in an idea so that it can take hold and grow.
• Access this week's AFP Action University Book Review development tool (video and materials) - http://www.afpnet.org/ActionUniversity